Let's consider the latter scenario. Suppose I'm a supplier with a contracted factory in China, and I've just produced 18 cubic foot mattresses that I've packed into a 40-foot high cube container. How would the process work if I contracted Amazon to transport this container from the factory in China to an FBA warehouse in the US?

In the case of heavy, bulky items, placement is 95% of the battle. If you have 100 mattresses, placing the right amount of mattresses in the East Coast, Midwest, and West Coast warehouses is critical. If you misplace cell phone cables, Amazon Air can move them very cheaply on an airplane amongst 25,000 other parcels from Seattle to Dallas. The cost of misplaced inventory is low for small items but high for heavy, bulky items.

Let's consider the latter scenario. Suppose I'm a supplier with a contracted factory in China, and I've just produced 18 cubic foot mattresses that I've packed into a 40-foot high cube container. How would the process work if I contracted Amazon to transport this container from the factory in China to an FBA warehouse in the US?

That's one of the biggest values of FBA, Fulfillment By Amazon. Amazon takes all the placement risk, which many people don't recognize in the broader ecommerce landscape. Amazon doesn't charge you more because they put a hundred mattresses in Allentown and some of those are actually delivering to customers in Orlando. They don't come back and charge you more as a result of the inventory not being in the right metropolitan area. Amazon always takes inventory placement risk, and that's a significant part. When you think about drop shipping or third-party fulfillment, that's going to be one of the big differentiators of having inventory close versus having inventory in one or two warehouses and then doing drop ship.

That's a comprehensive overview. I would like to delve into this on a leg by leg basis. Let's go back to China. For instance, Wayfair has what they call Asia consolidation. It's essentially warehouses there where they bring the suppliers' items, store them, before loading them onto a ship to the US in a 40-foot cube container. So how does this work with Amazon when I contract them as a transporter?

Amazon doesn't provide storage services. Instead, it purchases storage services in China for its own merchandise.